BY DARAH HANSEN, VANCOUVER SUN DECEMBER 20, 2011
Higher-than-average education levels have not spared new-comers to Canada from experiencing higher unemployment rates and lower incomes than their work colleagues who were born in the country, according to the Royal Bank of Canada.
If immigrants' skills were rewarded in a manner similar to that of Canadian-born workers, it would have resulted in $30.7 billion in increased incomes, the bank found in a new study that examines the immigrant labour market gap.
"It is a big number," said Dawn Desjardins, RBC assistant chief economist, in reference to what she called an "untapped" economic contributor.
"Obviously, if people are earning more, they are buying more things. They are buying homes, that type of thing. So you get a spinoff," she said.
Published Monday, the report updates a 2005 RBC study of immigrant employment rates and wages. The estimated earnings gap at the time was measured at $13 billion.
Desjardins said the bank used 2006 census data this time around to get a clearer educational, demographic and geo-graphic profile of immigrants to Canada, relative to the Canadian-born.
The latest report cites a "substantial" deterioration in the relative outcomes of newcomers over the past 30 years, "even as immigrant education levels have increased."
By 2006, new immigrants experienced a "significantly higher" unemployment rate of 6.9 per cent compared to 6.4 per cent among those born in Canada.
Immigrants were also seeing less on their paycheques: In 2005, the entire population of immigrants working full-time in Canada earned an average of $45,000 a year - about $700 (two per cent) less than the average wage for Canadian-born workers, the report found. Since then, the average wage for new immigrants has fallen further to $28,700.
Male newcomers were found to earn, on average, about $16,500 (24 per cent) less than Canadian-born workers, while the earnings gap for immigrant women was closer to $7,000 (17 per cent). At the same time, immigrant women were more likely to be unemployed than immigrant men.
Desjardins said the report was not intended to identify why the gap exists, though quality of education, language skills, credential recognition and discrimination are all considered contributing factors. Rather, the findings suggest the potential benefits from addressing the differences could be significant. "We really want people to know that there is hope. As demographics change and we have less people working in the labour force because they are aging and retiring, we do have a pool of really qualified people around us," Desjardins said. "We want to see everybody working to their full productivity, and that is good news for the economy."
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